Monster Beverage Corporation, started by two South Africans, was the best-performing US stock over the last 20 years with an incredible annualised return. Monster was created by Rodney Sacks and Hilton Schlosberg, who attended the University of the Witwatersrand (WITS). They emigrated to the US and joined forces to acquire Hansen Natural Corporation for $1.71 million. Hansen Natural Corporation dates back to the 1930s when Hubert Hansen and his sons began selling juice to retailers under the company name “Hansen’s Fruit and Vegetable Juices”. In the 1970s, the grandson of Hubert Hansen also started to develop sodas under the Hansen name. The company started to struggle and raked up massive losses by the late 1980s. Sacks and Schlosberg stepped in to acquire and save the beverage producer. After the acquisition, Sacks has been chairman and CEO of Hansen Natural Corporation, while Schlosberg served as president and COO. Their big break came in 2002 when they launched Monster Energy. Within ten years, they increased revenue to $2 billion. Monster Energy was so successful that Hansen Natural Corporation changed its name to Monster Beverage Corporation in 2012. The Coca-Cola Company bought a 16.7% stake for $2.15 billion in Monster in 2015. This stake has since grown to 19.3% due to share buybacks by Monster. Today, the company has numerous top brands, including Monster Energy, Burn, NOS, Full Throttle, Relentless, Mother, Reign, and Predator. In February 2022, it added several craft beers and hard seltzers to its product portfolio by acquiring CANarchy Craft Brewery Collective. What makes Monster Beverage Corporation stand out, apart from its energy drinks, is its stellar financial performance. Monster drinks are sold in 141 countries, and the company has a significant share of the $53 billion global energy drink market. Over the past 20-year period, Monster was the best-performing US stock, delivering a compounded annualised return of 42%. Investors will have received a compounded annualised return of 49.5% if you consider the rand’s depreciation. Put another way, a R1,000 investment in the company 20 years ago would have grown to R 3,115,732. The chart below shows the growth of a R1,000 investment between 2003 and 2023. Monster Energy, a USA created brand has received widespread acceptance including in Africa. Assess possible reasons that drew Monster to international markets such as South Africa. In the context of Monster, analyse the risk that the band must consider before making a decision of entering the South African market.
Monster Beverage Corporation, started by two South Africans, was the best-performing US stock over the last 20 years with an incredible annualised return. Monster was created by Rodney Sacks and Hilton Schlosberg, who attended the University of the Witwatersrand (WITS). They emigrated to the US and joined forces to acquire Hansen Natural Corporation for $1.71 million. Hansen Natural Corporation dates back to the 1930s when Hubert Hansen and his sons began selling juice to retailers under the company name “Hansen’s Fruit and Vegetable Juices”. In the 1970s, the grandson of Hubert Hansen also started to develop sodas under the Hansen name.
The company started to struggle and raked up massive losses by the late 1980s. Sacks and Schlosberg stepped in to acquire and save the beverage producer. After the acquisition, Sacks has been chairman and CEO of Hansen Natural Corporation, while Schlosberg served as president and COO.
Their big break came in 2002 when they launched Monster Energy. Within ten years, they increased revenue to $2 billion. Monster Energy was so successful that Hansen Natural Corporation changed its name to Monster Beverage Corporation in 2012. The Coca-Cola Company bought a 16.7% stake for $2.15 billion in Monster in 2015. This stake has since grown to 19.3% due to share buybacks by Monster. Today, the company has numerous top brands, including Monster Energy, Burn, NOS, Full Throttle, Relentless, Mother, Reign, and Predator.
In February 2022, it added several craft beers and hard seltzers to its product portfolio by acquiring CANarchy Craft Brewery Collective. What makes Monster Beverage Corporation stand out, apart from its energy drinks, is its stellar financial performance. Monster drinks are sold in 141 countries, and the company has a significant share of the $53 billion global energy drink market. Over the past 20-year period, Monster was the best-performing US stock, delivering a compounded annualised return of 42%. Investors will have received a compounded annualised return of 49.5% if you consider the rand’s
Monster Energy, a USA created brand has received widespread acceptance including in Africa.
Assess possible reasons that drew Monster to international markets such as South Africa.
In the context of Monster, analyse the risk that the band must consider before making a decision of entering the South African market.
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